Wall Street has surged , bringing an upbeat end to a tumultuous, holiday-shortened week as technology stocks rebounded, but the S&P 500 and the Dow Jones Industrial Average posted their biggest quarterly declines in more than two years.
The year started strong, but early gains evaporated as the markets entered a correction over interest rate jitters, fears of an escalating import tariff dispute between the United States and China, and a selloff in the tech sector.
Tech stocks reversed course on Thursday and the S&P 500 information technology index closed up 2.2 per cent after reaching a session high of 3.2 per cent, helping push the S&P 500 up 1.4 per cent, with the Dow and Nasdaq also rallying.
‘All the fears now look overblown. Interest rates, the concern about tariffs, we’re going to get into a trade war,’ said Doug Cote, chief market strategist at Voya Investment Management in New York. ‘But now clearer heads are prevailing. If anything this is a buying opportunity.’
Technology gains were led by Facebook, Intel , Alphabet and Microsoft shares.
‘Tech will always lead the charge in a bull market. And we’re in a bull market,’ said Cote.
The Dow Jones Industrial Average rose 254.69 points, or 1.07 per cent, to close at 24,103.11, the S&P 500 gained 35.87 points, or 1.38 per cent, to 2,640.87 and the Nasdaq Composite added 114.22 points, or 1.64 per cent, to 7,063.45.
Investors were unfazed by economic reports showing a slight increase in consumer spending and initial jobless claims dropping to a more than 45-year low.
In other data, core personal consumption expenditures (PCE) rose by 1.6 per cent year-on-year. The index, the Federal Reserve’s preferred measure of inflation, has been below the US central bank’s 2 per cent target since mid-2012.
Amazon.com closed up 1.1 per cent, recovering from a 4.6 per cent drop after President Donald Trump criticised the online retailer via Twitter early Thursday, claiming without evidence that the company pays ‘little to no taxes to state & local governments.’
Stocks shot up earlier in the week as comments from officials in the United States and China suggested the world’s two largest economies would renegotiate tariffs and trade imbalances, averting a trade war.
But worries that retaliatory tariffs would harm the global economy led investors to cut equity exposure to a four-month low in March and reduce holdings of US stocks to the lowest in nearly two years, according to a Reuters poll.
Advancing issues outnumbered declining ones on the NYSE by a 3.66-to-1 ratio; on Nasdaq, a 2.23-to-1 ratio favoured advancers.
Volume on US exchanges was 7.49 billion shares, compared to the 7.29 billion average over the last 20 trading days.